How to Find a Manufacturer for a Product: All-in-one Guide

If you’re an entrepreneur with an incredible product idea, you're likely excited about marketing your product. But when it comes to finding a manufacturer to actually bring your product to life, you may feel a little lost.

Let’s look at the differences between manufacturers and supplies and explore how you can manufacture your own product.

We’ll also look at how a Wise Business account may be a good option to make domestic and international payments instantly, conveniently, and a low-cost.

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Table of Contents
What is a Manufacturer? What is a Supplier? Finding a Manufacturer: Domestic and Overseas Suppliers How to Manufacture a Product Who Will You Partner With For Your Supply? How to Find a Manufacturer FAQ

What is a Manufacturer?

A manufacturer is a company that produces goods, often in large quantities, and sells them to retailers or wholesalers for them to develop them further. Manufacturers can be found in various industries, such as electronics, food and beverage, and furniture, to name a few.

For example, if you have an idea for a new line of clothing, a manufacturer would be the company responsible for actually creating the clothing items, from cutting and sewing the fabric to adding finishing touches like buttons and zippers.

What is a Supplier?

Although these terms can sometimes be used synonymously, the supplier is typically the entity that provides the raw materials or components that a manufacturer needs to produce their finished product.

If we look at our example previously, while the manufacturer is who’s actually making the clothing itself, the supplier might be a company that provides fabrics, buttons, and zippers. Without suppliers, manufacturers would not be able to produce their products, so a reliable supplier is part of the success of a manufacturer.

Is a manufacturer a supplier?

By definition, it’s quite possible for a manufacturer to also act as a supplier as they offer goods to other businesses. However, a manufacturer and a supplier serve distinct purposes in the production process and roles in the supply chain.

Is a manufacturer a distributor?

Now we introduce another player in the supply chain - the distributors. They’re responsible for getting the finished product from the manufacturer to the end consumer or vendors. This could be your business or something like a 3PL provider.

The clothing manufacturer who is making the product line would make all the products, and the distributor (in this case, your business) would purchase those shirts and then sell them to consumers.

Finding a Manufacturer: Domestic and Overseas Suppliers

Ready to go on the hunt for a reliable manufacturer? When starting your search, you’ll quickly realize that there are two options: sourcing domestically or abroad. This might lead you to think, “What are the differences between manufacturers near me and manufacturers abroad?” It’s often a smart idea to have one of both in case there are issues with shipments.

Let’s look at an overview of the perks and downsides of domestic and overseas sourcing.

Domestic sourcing

Local manufacturers are primarily known to ship faster and produce higher-quality goods, but are more expensive.

Pros

• Faster turnaround time
• Faster shipping time
• Better quality control
• Reduced shipping costs
• Supports the local economy
• High-quality labor and manufacturing standards
• Marketing appeal
• Greater payment security
• Easier communication

Cons

• Higher labor and production costs
• Limited options for niche products
• Higher minimum order quantities

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Overseas sourcing

Working with manufacturers abroad can be more cost-effective, but shipping times are often longer, and you’ll have to deal with customs clearance and importing.

Pros

• Lower labor and production costs
• Greater product options for specialized products
• Lower minimum order quantities
• Large-scale production
• Many manufacturers to choose from

Cons

• Longer turnaround time due to shipping and customs processes
• Quality control challenges
• Communication and language barriers
• Ethical and environmental concerns, such as poor labor conditions and carbon emissions from shipping
• Lower perceived quality
• Lower manufacturing and labor standards in some cases

Wise Business: Save While Making Overseas Payments

Wise Business is a business account that can help you save money when paying overseas manufacturers. With Wise, you can pay invoices in a range of currencies, and our low and transparent fees mean you get a better exchange rate than most banks offer.

Wise Business also offers batch payments, helping you up to 1000 invoices for supplier, manufacturers, or contractors in one click. We also have an API that allows you to automate your payment process, and the best part is that both features come with no additional payment.

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How to Manufacture a Product

Now it’s time to turn your idea into a physical object you can start selling. In this section, we'll show you how to turn your product concept into a real-life, tangible item. From researching manufacturers to communicating your design and placing your order, we'll cover all the steps you need to know to manufacture a product like a pro.

Step 1: Risks of choosing a manufacturer²

• IP theft: One of the biggest risks of working with a manufacturer is the potential for intellectual property theft. You’ll always want to have a clear contract that includes confidentiality and non-disclosure agreements to protect your ideas and designs.
• Bad communication: Poor communication can lead to misunderstandings, delays, and mistakes during the manufacturing process. Communication is key in any aspect of doing business, so find a manufacturer that communicates clearly and frequently throughout the process.
• Slow delivery: Delays in production and shipping can be frustrating and costly, so you’ll want to vet each manufacturer you consider. You’ll want to check if they have a proven track record of delivering on time.
• Payment challenges: Payment challenges can arise when working with overseas manufacturers, including currency exchange rates, international wire transfer fees, and delays in payment processing. Consider using a payment platform like Wise Business to make payments more efficient and cost-effective.
• Order quantity too high: Some manufacturers may require a high minimum order quantity, which can be challenging for small businesses. The best manufacturers for SMBs (small-to-medium businesses) are ones that can accommodate order sizes and have flexible production options.

Step 2: Research

The research process is everything when it comes to choosing the perfect manufacturer. After all, you’re here to make sure that the product you’re selling is fairly priced, good quality, and can be packaged and shipped out nicely.

What are you trying to manufacture?

But before you start looking for a manufacturer, get a clear understanding of what you're trying to get made in the first place. What will the product look like, what materials do you want to use, and what are your production requirements? The more specific you can be about your needs, the easier it will be to find a manufacturer that can meet them.

Once you’ve got that down, where can you start looking for a qualified manufacturer? Here are some places online:

Alibaba

Although best known as a huge marketplace for purchasing cost-effective products, Alibaba is also popular for connecting businesses with manufacturers and suppliers from around the world. It's a great starting point for researching potential manufacturers, as you can browse product categories and filter by supplier location, minimum order quantity, and other criteria. They also make it easy to find quality manufacturers, as you can look for qualifications like being verified (their facility has been visited and evaluated) and having trade assurance (order protection from payment to delivery).

Manufacturer directories

Manufacturer directories are another valuable resource for finding potential manufacturers. These directories list manufacturers by industry and location, making it easy to find companies that specialize in your product type. Examples of popular directories include ThomasNet, MFG.com, and Kompass.

Google

Good old Google can also be a useful tool for your search. Start by searching for keywords related to your product and industry, and narrow your search by location and other criteria.

Referrals

Word of mouth is another great option, as others can attest to their reliability and trustworthiness. You can ask other business owners or industry contacts for recommendations and referrals that have a proven track record of quality.

NAICS codes

NAICS (North American Industry Classification System) codes are standardized codes used to classify businesses by industry. Using NAICS codes can help you identify manufacturers that specialize in your product type. All you have to do is search for relevant codes on the Census Bureau website and use them to narrow your search.³ 

Step 3: Outreach and collection of information

Making sure you have all the information you need is crucial in fostering a successful partnership with your manufacturer.

What is a minimum order quantity?

Minimum order quantities (MOQs) refer to the minimum number of units a manufacturer is willing to produce in a single order. For instance, if you’re buying sticker packs at $0.10 each and the MOQ is 500, you’ll have to buy a minimum of 500 packs at $50. Depending on the product type and production processes involved, MOQs land on a wide spectrum, so you’ll want to discuss this early on to avoid any bad surprises.

Negotiating minimum order quantities

MOQs can sometimes be a sticking point for businesses, as they can impact costs and cash flow. Usually, MOQs are often tied to production efficiencies and economies of scale. The more units you order, the lower the per-unit cost may be. When negotiating, talk about any cost considerations with potential manufacturers, as they might just be willing to adjust MOQs or pricing based on volume.

Discussing payment terms

Cash flow is a huge consideration for any business, and working with manufacturers is no exception. When discussing payment terms with potential manufacturers, be sure to ask about their preferred payment methods and timelines and be clear about your own payment expectations and any constraints you may have. Some manufacturers may even offer flexible payment terms or installment plans.

Communicating with manufacturers and suppliers

No matter whether you’re discussing payment, MOQs, or something else altogether, clear and effective communication is a must when working with manufacturers and suppliers. Establish regular communication channels and set expectations for response times. It can also be helpful to have a single point of contact within the manufacturer or supplier's organization.

Step 4: Communicate your designs

Communicating your designs goes beyond just talking about them and describing them. Especially if you’re working with international manufacturers that don’t speak the same language, visual aids certainly help. A detailed design specification should include everything from materials to colors to dimensions and can be presented as a detailed sketch or a technical drawing. To take things a step further, you could use 3D modeling software or computer-aided design (CAD) programs to create virtual models and develop that into a physical prototype.

Step 5: Order samples

Order samples are a great way to see whether the manufacturer got it right. Did they grasp your idea and produce it how you wanted? Samples can give you a firsthand look at the quality of the work and help you determine if they're the right fit.

Step 6: Negotiate

If, for some reason, you believe you can get a better deal on your contract with the manufacturer, you can negotiate your terms. But this will start by knowing your priorities. For example, what are your must-haves, and what are you willing to compromise? You’ll also need a solid idea of market pricing and typical contract terms so you can assess whether the offer is reasonable or not.

Step 7: Consider the cheapest and best ways to pay suppliers

When it comes to payment, you’ll want to strike a balance between cost and convenience. As traditional methods like wire transfers and credit cards can be expensive and time-consuming, paying invoices using online payment services like Wise Business can offer a faster, more affordable solution.

With Wise Business, you can pay suppliers in China, Germany, or elsewhere in their local currency, avoiding costly currency conversions and fees. You can pay invoices and make recurring payments in over 70 countries.

Step 8: Place your order

After the long and arduous process of selecting a manufacturer, it's time to place your order. Once you’ve negotiated the terms of your agreement, you’ll typically sign a purchase agreement and provide a deposit or down payment. The manufacturer will then begin production, and you'll be responsible for paying the remaining balance upon completion of the order.

When it comes time to pay your invoice, consider using a platform like Wise Business to save on international transfer fees and make invoice payment seamless and secure.

Who Will You Partner With For Your Supply?

Congratulations, you've successfully navigated the winding path of finding a manufacturer! As an entrepreneur, the process of manufacturing a product can be both exhilarating and intimidating, but the tips and strategies outlined in this guide will make sure you're well on your way to manifesting your product.

Remember to stay vigilant and keep your priorities in mind, whether you're negotiating minimum order quantities or paying your invoices. So now, one question remains: who will you partner with for your supply?

How to Find a Manufacturer FAQ

Interested in learning a little more? Here are some answers to some frequently asked questions.

How do I find manufacturers near me?

Luckily, there isn’t just one place to look. To find manufacturers nearby, start by searching online directories, using NAICS codes, or reaching out to industry connections. You can also use search engines like Google to find potential manufacturer websites or consider working with a sourcing agent or third-party logistics provider to help connect you with local manufacturers.

How should small businesses find manufacturers? What should they consider?

Finding a manufacturer for small business is just like any other sized business and should consider the same aspects such as location, cost, quality, and reputation. However, because small businesses may not be as established, they’ll want to make a more careful and conscious choice. This means taking a closer look at minimum order quantities and where they are located, as they might not have the funds to work with more than one manufacturer.

What information do I need before approaching a manufacturer?

Before approaching a manufacturer, prepare a list of questions and have a clear idea of the product you want to create, your target market, and your budget. You should also do research on the manufacturing process, the materials needed, and the potential costs involved. Having this information in hand can help you have a more productive and successful conversation with potential manufacturers.

What kind of products can I manufacture?

The range of products that can be manufactured is virtually limitless as long as there is a market demand and the resources to make them. Choosing what to manufacture depends on your interests and what will ultimately sell so your business can make a profit.

Manufacturer vs. vendor: What’s the difference?

Manufacturers are companies that make goods from raw materials or components, while vendors are companies that sell products to customers but might not necessarily play a part in the production aspect.

How to find manufacturers in the U.S.?

There isn’t much of a difference in finding manufacturers in the U.S. and elsewhere. As a starting point, you can use online directories such as ThomasNet or MFG.com or even search for suppliers on social media platforms like LinkedIn or Facebook.

What's a good way to pay overseas manufacturers and suppliers?

Wise Business helps simplify the process of paying manufacturers with a multi-currency account that is focused on ease-of-use and transparency. It's easy to sign up for Wise and integrate us into accounting software, such as QuickBooks, Xero, Wave, and Sage.

Wise Business also uses the mid-market exchange rate, tells you exactly what you will receive or send with no hidden costs.

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Sources:
1.https://www.trustpilot.com/review/wise.com
2.https://www.businessnewsdaily.com/8820-how-to-find-factory.html
3.https://www.census.gov/naics/